UPDATE: Bankruptcy Court Approves Cygnus Reorganization Plan

Publisher expects to emerge from Chapter 11 in two weeks.

At a hearing Tuesday, a U.S. bankruptcy court in Delaware approved Cygnus Business Media’s pre-packaged plan of reorganization. The publisher said it expects to emerge from Chapter 11 protection within the next two weeks.

The court’s approval provides that Cygnus’ general unsecured creditors, including all vendors, will be paid in full in “the ordinary course,” the company said.

Cygnus filed the reorg plan last month, which would result in a secured debt-equity exchange to reduce the company’s debt from $180 million to $60 million. Cygnus said it had reached an agreement with 23 of its 24 lenders on a pre-packaged restructuring but an out-of-court settlement required a unanimous decision.

According to Cygnus interim CEO Charles Carnival, the support the company has received from advertisers and vendors during the reorg process has “provided a great deal of stability and focus.” Cygnus is being advised by legal counsel Curtis, Mallet-Prevost, Colt & Mosle, financial advisors Zolfo Cooper and investment bankers Miller Buckfire & Co.

Documents included in the bankruptcy filing indicated that Cygnus expects total revenue to fall by $35 million from $107 million in 2008 to $71.4 million in 2009.